| RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS |
NOTE
11 RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The
financial statements for the year ended December 31, 2023 and the accumulated deficit as of December 31, 2022 have been restated. Subsequent
to the original issuance of these financial statements, our audit committee and management determined the following:
As of December 31, 2022
●
the Company erroneously did not recognize a valuation decrease in recorded deferred tax assets in its Taiwan subsidiary.
●
the Company erroneously did not recognize an intercompany payable to its subsidiary, Iveda Taiwan.
Assets
affected included other assets and liabilities affected included accounts and other payables.
As of December 31, 2023
●
the Company had erroneously capitalized software development costs during 2023 and 2024 Quarterly filings.
●
In addition, the Company is making certain reclassification entries.
The
effects on the previously issued financial statements are as follows:
For
periods before 2022, Management of the Company determined that the following:
[1]
The Deferred Tax asset of $146,560 was no longer a valid tax difference. The amount was recorded as an adjustment to accumulated deficit
at December 31, 2022.
[2] The intercompany
amount due to Iveda Taiwan was understated by $200,000 related to a payment made on behalf of Iveda US by Iveda Taiwan.
For
the year ending December 31, 2023, Management of the Company determined that the following:
[3]
An adjustment for $792,612 related to expensing the research and development expense was needed related to activity in 2023. The amount
was recorded as a reduction to assets and the associated expense was recorded to the statement of operations.
[4] An adjustment
for $180,000 to expense its investment in Iveda Phils JV originally recorded as a consolidation but we have determined this investment
should have been recorded as the equity method. This effected cash, account and other payables, Joint Venture Non-Controlled Equity Portion,
Accumulated Other Comprehensive Income (Loss) and accumulated deficit
The
following table presents the effect of the restatements of the Company’s previously issued balance sheet:
SCHEDULE
OF RESTATEMENTS
| | |
| | |
| | |
| |
| | |
As of December 31, 2023 | |
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| | |
| | |
| | |
| |
| Other Assets | |
$ | 444,723 | | |
$ | (146,560 | )[1] | |
$ | 298,163 | |
| Accounts and Other Payables |
|
|
(1,110,087) |
|
|
|
(200,000 |
)[2] |
|
|
- |
|
|
|
|
|
|
|
|
1,173 |
[4] |
|
|
(1,308,914 |
) |
| Property and Equipment, Net | |
| 891,187 | | |
| (792,612 | )[3] | |
| 98,575 | |
| Joint Venture Non-Controlled Equity Portion |
|
$ |
99,048 |
|
|
|
(99,048 |
)[4] |
|
|
- |
|
| Cash and Cash Equivalents |
|
|
4,754,597 |
|
|
|
(16,093 |
)[4] |
|
|
4,738,504 |
|
| Accumulated Other Comprehensive Income (Loss) |
|
|
(222,380 |
) |
|
|
(962 |
)[4] |
|
|
(221,418 |
) |
| Accumulated Deficit | |
$ | (47,941,796 | ) | |
$ | (1,254,101 | )[5] | |
$ | (49,195,897 | ) |
| [1] | | Deferred Tax Asset eliminated from Other Assets |
| | | |
| [2] | | The intercompany amount due to Iveda Taiwan was understated by $200,000 related to a payment made on behalf of Iveda US by Iveda Taiwan added back to Accounts and Other Payables |
| | | |
| [3] | | 2023 capitalized software expensed to Research and Development |
| | | |
| [4] | | An adjustment for $180,000 to expense its investment
in Iveda Phils JV originally recorded as a consolidation but we have determined this investment should have been recorded using the equity
method. On the balance sheet this effected Cash and Cash equivalents, Accounts and Other Payables, Joint Venture Non-Controlled Equity Portion, Accumulated
Other Comprehensive Income (Loss).
|
| | | |
| [5] | | Each of the above restatements effected Accumulated Deficit |
The
following table presents the effect of the restatements and reclassification on the Company’s previously issued and reported statement
of operations
| | |
| | | |
| | | |
| | |
| | |
As of December 31, 2023 | |
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| | |
| | | |
| | | |
| | |
| Research and Development | |
$ | 4,500 | | |
$ | 792,612 | | |
$ | 797,112 | |
| Loss from Investment in Iveda Phils
JV |
|
|
- |
|
|
|
180,000 |
|
|
|
180,000 |
|
| Eliminate JV G&A recorded 2023 |
|
|
162,686 |
|
|
|
(162,686) |
|
|
|
- |
|
| Eliminate JV Interest Income recorded 2023 |
|
|
(11 |
) |
|
|
11 |
|
|
|
- |
|
| Eliminate Loss attributable to non-controlled interest |
|
|
(97,605 |
) |
|
|
97,605 |
|
|
|
- |
|
| | |
| | | |
| | | |
| | |
| Net Loss | |
$ | (3,235,124 | ) | |
$ | (907,542 | ) | |
$ | (4,142,666 | ) |
| Basic and Diluted Cost per Share | |
$ | 0.20 | | |
| | | |
$ | 2.07* | |
| * | Restated per share amount
reflects a reverse stock split of the outstanding shares of our Common Stock at a ratio of 1-for-8 effected on September 17,
2024. |
The
following table presents the effect of the restatements and reclassification on the Company’s previously issued and reported statement
of operations
| | |
Common Stock | | |
Common Stock Amount | | |
Additional Paid in Capital | | |
Accumulated Deficit | | |
Non-Controlling Interest | | |
Accumulated Other Comprehensive (Loss) | | |
Total
Stockholders’
Equity | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance, December 31, 2022 as previously reported | |
| 1,883,342 | | |
$ | 19 | | |
$ | 52,497,045 | | |
$ | (44,706,671 | ) | |
$ | - | | |
$ | (220,643 | ) | |
$ | 7,569,750 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Correction of Deferred Tax Asset | |
| - | | |
| - | | |
| - | | |
| (146,560 | ) | |
| - | | |
| - | | |
| (146,560 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Correction of Prior Period Intercompany Accounts Payable | |
| - | | |
| - | | |
| - | | |
| (200,000 | ) | |
| - | | |
| - | | |
| (200,000 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance, December 31, 2022 as restated | |
| 1,883,342 | | |
| 19 | | |
| 52,497,045 | | |
| (45,053,171 | ) | |
| - | | |
| (220,643 | ) | |
| 7,223,190 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance, December 31, 2023 as previously reported | |
| 2,021,236 | | |
| 20 | | |
| 54,065,775 | | |
| (47,941,796 | ) | |
| (99,048 | ) | |
| (222,380 | ) | |
$ | 5,802,571 | |
| Balance | |
| 2,021,236 | | |
| 20 | | |
| 54,065,775 | | |
| (47,941,796 | ) | |
| (99,048 | ) | |
| (222,380 | ) | |
$ | 5,802,571 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Correction of Deferred Tax Asset | |
| - | | |
| - | | |
| - | | |
$ | (146,560 | ) | |
| - | | |
| - | | |
$ | (146,560 | ) |
| Correction of Prior Period Intercompany Accounts Payable | |
| - | | |
| - | | |
| - | | |
| (200,000 | ) | |
| - | | |
| - | | |
| (200,000 | ) |
| Capitalized Software expensed to Research and Development | |
| - | | |
| - | | |
| - | | |
$ | (792,612 | ) | |
| - | | |
| - | | |
$ | (792,612 | ) |
| Expense Investment in Iveda Phils JV, net | |
| - | | |
| - | | |
| - | | |
| (114,929 | ) | |
| 99,048 | | |
| 962 | | |
| (14,919 | ) |
| Balance, December 31, 2023 as restated | |
| 2,021,236 | | |
$ | 20 | | |
$ | 54,065,775 | | |
$ | (49,195,897 | ) | |
| - | | |
$ | (221,418 | ) | |
$ | 4,648,480 | |
| Balance | |
| 2,021,236 | | |
$ | 20 | | |
$ | 54,065,775 | | |
$ | (49,195,897 | ) | |
| - | | |
$ | (221,418 | ) | |
$ | 4,648,480 | |
The following table presents the effect of the restatements
of the Company’s previously issued statement of cashflows:
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| | |
As of December 31, 2023 | |
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| Net Loss | |
$ | (3,235,124 | ) | |
| (792,612 | )[3] | |
$ | - | |
| | |
| | | |
| (114,930 | )[4] | |
| (4,142,666 | ) |
| Loss from Iveda Phils Joint Venture | |
| | | |
| 180,000 | | |
| 180,000 | |
| Increase (Decrease) in Accounts and Other Payables | |
| (522,460 | ) | |
| (1,173 | )[4] | |
| (523,633 | ) |
| Net Cash Used in Operating Activities | |
| (2,604,645 | ) | |
| (792,612 | )[3] | |
| | |
| |
| | | |
| 180,000 | [4] | |
| | |
| |
| | | |
| (114,930 | )[4] | |
| | |
| | |
| | | |
| (1,173 | )[4] | |
| (3,333,360 | ) |
| Purchase of Property and Equipment, Net | |
$ | (878,205 | ) | |
$ | (792,612 | )[3] | |
$ | (85,593 | ) |
| | |
| | | |
| | | |
| | |
| Net Cash Provided by (Used in) Investing Activities | |
$ | (878,205 | ) | |
$ | (792,612 | )[3] | |
$ | (85,593 | ) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Joint Venture Non-Controlled Equity Portion |
|
|
(99,048) |
|
|
|
99,048 |
[4] |
|
|
- |
|
| Change in restricted Cash |
|
|
(685 |
) |
|
|
685 |
[5] |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Cash Provided by Financing Activities |
|
|
924,100 |
|
|
|
99,048 |
[4] |
|
|
|
|
| |
|
|
|
|
|
|
685 |
[5] |
|
|
1,023,833 |
|
| EFFECT OF EXCHANGE RATE CHANGES ON CASH |
|
|
1,252 |
|
|
|
528 |
[4] |
|
|
1,780 |
|
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
(2,557,499 |
) |
|
|
(15,841 |
)[4] |
|
|
(2,573,540 |
) |
| CASH AND CASH EQUIVALENTS – END OF PERIOD |
|
|
4,754,596 |
|
|
|
(16,092 |
)[4] |
|
|
|
|
| |
|
|
|
|
|
|
129,778 |
[6] |
|
|
4,868,282 |
|
| [3] |
2023
Capitalized Software expensed to Research and Development |
| [4] |
An adjustment for $180,000 to expense its investment in Iveda Phils JV originally recorded as a consolidation but
we have determined this investment should have been recorded as the equity method. The net loss effect is $180,000 less the $65,070 loss
recorded in 2023 in consolidation. Net $114,930 additional loss recorded in 2023. |
| [5] |
Eliminate line item for change in restricted cash of $685 |
| [6] |
Added Restricted Cash to Cash and Cash Equivalents |
|